JAKARTA (TheInsiderStories) – Indonesia’s external debt at the end of the first quarter of 2017 stood at US$326,3 billion or grew by 2.9 percent year on year (yoy) and up slightly by 2.0 percent from previous quarter. The increase of external debt was contributed by the decline of private external debt growth, Bank Indonesia said.
In the first three month of this year, private external debt grow by 3.6 percent yoy or higher compared to the previous quarter which grow by 5.5 percent. On the other side, the government’s external debt, both the government and central bank, grew by 11 percent yoy, compared to previous quarter’s growth by 10 percent.
“The external debt in the first quarter of 2017 remains healthy, but we are still aware of its risk to the economy,” said Bank Indonesia’s Director for Communication Department Tirta Segara.
Indonesia’s debt to GDP ratio at the end of the first quarter of 2017 was relatively stable at around 34 percent, lower compared to the first quarter of 2016 at 37 percent of GDP.
Separately, economist of Samuel Asset Management Lana Soelistianingsih said, the increase of external debt was needed because it was not for productive debt, but for debt refinancing.
The external debt for working capital at at the end of the first quarter of 2017 decreased 1.14 percent, while the external debt for refinancing grew by 10.54 percent. This indicates that working capital debt is still difficult to grow because the economy in the first three month, especially private sector, was still holding back for expanding their business. RF)